Q2 FREIGHT MARKET RECAP OF WEBCARGO BY FREIGHTOS: TARIFF TURMOIL, TRANSPACIFIC SURGES & MARKET COOLING ACROSS KEY LANES
- barboraarendasova
- Jul 3
- 4 min read
The Freightos Baltic Index Global benchmark was level for most of Q2 but in early June, following the US’s reduction of tariffs on Chinese goods from 145% to 30%, the global container spot rate spiked by 66% due to transpacific frontloading ahead of the policy’s August expiration date.
To close the quarter though, rates cooled by 22% from that mid-June high to $2,894/FEU – still 40% higher than the end of Q1 – as that tariff-driven transpacific demand surge started to ease and as carriers had also increased capacity levels beyond that of demand.
Asia - N. America rate trends were thus the big drivers of global rate movements this quarter and reflect the overall benchmark shifts:
Though China-US volumes fell sharply from April to mid-May when tariffs were at 145%, carriers prevented a rate collapse through a significant raft of blanked sailings and service suspensions. Asia - N. America West Coast rates were therefore about level from April through mid-May. Prices climbed moderately in the second half of May but shot up by more than $3,000/FEU and 115% from the end of May to mid-June to a high of about $6,000/FEU as demand surged following the tariff reduction. By the end of the quarter though, prices had fallen 43% from that peak to $3,388/FEU.
During the post-Lunar New Year lull in April and May, Asia - Europe and Asia - Mediterranean rates were level overall at about $2,400/FEU and $3,000/FEU respectively. Peak season demand – which had started in May last year due to Red Sea diversion-driven longer lead times – started to pick up in June, and was reflected in climbing spot rates late in the quarter.
Asia–Europe and Mediterranean rates each closed June more than 25% higher than at the end of May at $2,969/FEU and $4,222/FEU respectively as increased demand –as well as some port congestion and capacity shifts to the transpacific – supported rate increases both at the start of the month and in mid-June.
But prices on each lane cooled toward the end of the month suggesting market conditions may not support significant July GRIs unless carriers reduce capacity. And, like on the transpacific, rates are significantly lower than a year ago, suggesting capacity growth is putting downward pressure on rates even as carriers continue to avoid the Red Sea.
Despite a looming July deadline after which the US may increase tariffs on a long list of countries, including those in the European Union, transatlantic rates remained level at $1,929/FEU in May and June, down only slightly from April levels. The lack of demand strength and frontloading may reflect US automotive, steel and aluminum tariffs already depressing volumes on lanes where trade in these types of goods plays a significant role.
Despite fears that the Israel-Iran conflict which broke out in early June would disrupt supply chains, the Strait of Hormuz – as well as Israeli container ports – remained open throughout. The recent ceasefire makes it much less likely that Iran will move to close the important waterway.
In air cargo, Freightos Air Index data shows Q2 global rates were stable overall, despite significant volume and capacity shifts – especially in the freighter market – as, to start May, the US canceled Chinese eligibility for the de minimis exemption heavily relied upon for B2C e-commerce air cargo shipments.
Transpacific rates climbed from the $5.00/kg level to about $5.50/kg to start Q2, possibly a sign of frontloading ahead of the de minimis suspension or an increase in electronics exempted from tariff increases. Following the de minimis announcement, transpacific volumes fell sharply. But as e-commerce volumes were concentrated in the chartered freighter market, and as freighter capacity began being redistributed to other lanes, spot rates eased only moderately to a still quite elevated $5.25/kg level for the rest of the quarter.
Prices from China to Europe climbed from about $3.20/kg to about $3.80/kg in early April, and stayed at about the $3.50/kg -$3.75/kg level for much of the quarter. Prices did ease to $3.45/kg in late June. Transatlantic rates eased from $2.40/kg to start the quarter to $1.80/kg in late June. Significant redeployment of transpacific capacity to other lanes following the e-commerce volume drop could be a driver of some of the downward pressure on rates seen in some other trades like these.
Source: WebCargo by Freightos
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